Transferring old workplace pension into a SIPP

Dale72

Sorry Albermarle, I think I've become overly sensitive with this, after months of trying to get it done, no offence intended. Yes the £27 is a recent figure, I ran the calculation on their (Willis,Towers,Wtason) site. I appreciate to some people this might be a significant amount, but given the high transfer out value, and the fact that I've been managing my own SIPP, relatively happily, for quite a while now, I'm happy to take the risk.

Albermarle

If it does not progress with your £2k IFA , then you could try here .
https://www.fidelity.co.uk/fidelity-retirement-service/?intcmp=enhancedlist_multiple_retireadvice_may_2019

TVAS

Firstly £7,000 is daylight robbery. I know this will not be the case. 3% of the transfer value is a standard IFA charge if they want to charge you an ongoing advice fee (OAC) no more than 0.25% on the transfer amount only. If you are subsequently not happy with the IFA service you can ask the provider to remove the charge from your plan. Secondly the reason why you are struggling to find an IFA is because they have a record of poor advice on final salary transfers (if this is what it is). Let me give you an example. I reviewed a transfer for £1,000,000 the advice was paid £20,000. The compensation to the client was £500,000 because we valued his pension at £1,500,000 so the transfer value was not generous. The advice was bad. The FCA have asked advisers to review past advice I have just completed a contract we had 120 cases and the compensation is £25,000,000 the highest £1,000,000 the lowest £11,000. Also they may only want to deal with high net worth clients so deem your amount too low for the work involved. You have decided to transfer but you have not said why. You are transferring risk and cost from your employer to yourself. What is your reason? If you are not taking benefits NOW there is no need to transfer NOW. Like Albermarle I am also struggling to believe it is £27 at age 67 for £68,000. So on that basis I cannot asses if it is a generous transfer value. When you left that employer you would have received a benefit statement which states your annual pension at date of leaving the scheme. You must have received a transfer statement now which will have a higher pension because it gets increased each year. Divide the pension on the transfer statement by 68,000 if the factor is under 35 it is not good value for money if they also provide a pension for your spouse and an increasing pension both which these features cost a fortune to buy on the open market. So I ask again the information you are using to transfer seems at the very least flawed and you do not want to take benefits now. Had I been reviewing your case I would have failed it on timing. Meaning there was no need to transfer now. Good luck. 

GingerPrince18

TVAS - are you saying the rule of thumb should be about 35 x pension ? 
I'm in a similar boat, 2785 pension and 80k transfer valuation. going off your rule of thumb, should be nearer 97.5k ? 
I mean, I've been investing for a number of years and am happy to take the risk of taking the transfer pot + topping up monthly myself in a SIPP. I already have a DB pension + state that will pay annually around 50k so this would be on top. 
hell. if I did absolutely nothing but invest it in big caps, a divi yield of 3.5% on the 80k would match what they're offering per year. 
such a shame I can't find anyone to give the advice for a reasonable fee. 

Albermarle

I'm in a similar boat, 2785 pension and 80k transfer valuation. going off your rule of thumb, should be nearer 97.5k ? 

It varies from scheme to scheme and from year to year . The only thing guaranteed is the pension income you have accrued .

https://www.fidelity.co.uk/fidelity-retirement-service/?intcmp=enhancedlist_multiple_retireadvice_may_2019

Costabit

TVAS said:

Firstly £7,000 is daylight robbery. I know this will not be the case. 3% of the transfer value is a standard IFA charge if they want to charge you an ongoing advice fee (OAC) no more than 0.25% on the transfer amount only. If you are subsequently not happy with the IFA service you can ask the provider to remove the charge from your plan. Secondly the reason why you are struggling to find an IFA is because they have a record of poor advice on final salary transfers (if this is what it is). Let me give you an example. I reviewed a transfer for £1,000,000 the advice was paid £20,000. The compensation to the client was £500,000 because we valued his pension at £1,500,000 so the transfer value was not generous. The advice was bad. The FCA have asked advisers to review past advice I have just completed a contract we had 120 cases and the compensation is £25,000,000 the highest £1,000,000 the lowest £11,000. Also they may only want to deal with high net worth clients so deem your amount too low for the work involved. You have decided to transfer but you have not said why. You are transferring risk and cost from your employer to yourself. What is your reason? If you are not taking benefits NOW there is no need to transfer NOW. Like Albermarle I am also struggling to believe it is £27 at age 67 for £68,000. So on that basis I cannot asses if it is a generous transfer value. When you left that employer you would have received a benefit statement which states your annual pension at date of leaving the scheme. You must have received a transfer statement now which will have a higher pension because it gets increased each year. Divide the pension on the transfer statement by 68,000 if the factor is under 35 it is not good value for money if they also provide a pension for your spouse and an increasing pension both which these features cost a fortune to buy on the open market. So I ask again the information you are using to transfer seems at the very least flawed and you do not want to take benefits now. Had I been reviewing your case I would have failed it on timing. Meaning there was no need to transfer now. Good luck. 

@TVAS
You have great knowledge and make great posts thanks and look forward to your responses.
But if you can, stick in a few paragraphs if possible.
It sure would make them easier to follow.

GingerPrince18

Albermarle said:

I'm in a similar boat, 2785 pension and 80k transfer valuation. going off your rule of thumb, should be nearer 97.5k ? 

It varies from scheme to scheme and from year to year . The only thing guaranteed is the pension income you have accrued .

https://www.fidelity.co.uk/fidelity-retirement-service/?intcmp=enhancedlist_multiple_retireadvice_may_2019

why are you linking to that page ? it seems a general pension advice page ? 3.5k plus vat ? are you saying that's the cheapest you think there is ?

Albermarle

GingerPrince18 said:

Albermarle said:

I'm in a similar boat, 2785 pension and 80k transfer valuation. going off your rule of thumb, should be nearer 97.5k ? 

It varies from scheme to scheme and from year to year . The only thing guaranteed is the pension income you have accrued .

https://www.fidelity.co.uk/fidelity-retirement-service/?intcmp=enhancedlist_multiple_retireadvice_may_2019

why are you linking to that page ? it seems a general pension advice page ? 3.5k plus vat ? are you saying that's the cheapest you think there is ?

There are numerous posts on this subject on this forum and Fidelity is sometimes mentioned as a possible solution .
Their fee seems about normal and would be cheap for a large transfer amount .

Thrugelmir

GingerPrince18 said:

I mean, I've been investing for a number of years and am happy to take the risk of taking the transfer pot + topping up monthly myself in a SIPP.

As a general observation that's the greatest danger currently. A combination of factors has seemingly made the stock market a one way bet. The higher it rises. The greater the level of investor complacency.  There's a generation of investors who have never experienced a sizable long term correction. 

Dale72

GingerPrince18 said:

TVAS - are you saying the rule of thumb should be about 35 x pension ? 
I'm in a similar boat, 2785 pension and 80k transfer valuation. going off your rule of thumb, should be nearer 97.5k ? 
I mean, I've been investing for a number of years and am happy to take the risk of taking the transfer pot + topping up monthly myself in a SIPP. I already have a DB pension + state that will pay annually around 50k so this would be on top. 
hell. if I did absolutely nothing but invest it in big caps, a divi yield of 3.5% on the 80k would match what they're offering per year. 
such a shame I can't find anyone to give the advice for a reasonable fee. 

I have found an IFA that will give advice only for £750, and then AJ Bell (or whoever) will enact the transfer, irrespective of what the advice is.